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Insights 02: 29 January 2016
The Local Formula: Myths, Facts & Challenges
Dr Oliver Hartwich discusses the EU in Wellington on 17 February
Jason Krupp talks about his new report, The Local Formula

The Greens' watchdog
Dr Oliver Hartwich | Executive Director |
Albert Einstein said, “for an idea that does not first seem insane, there is no hope.” If Einstein is right, there is hope for the Greens’ proposal to establish a new office to cost political parties’ new policies.

In her ‘State of the Nation’ speech, Greens co-leader Metiria Turei presented the idea of having an independent unit within Treasury to assess election promises. In this way, Turei argued, voters would have better information to make more informed choices.

It did not take long for the government to reject the Greens’ idea out of hand. The Prime Minister dismissed the proposal saying that parties could just ignore the numbers and proceed with their preferred policies regardless. Fair enough, they might indeed. But Key’s objection misses the point.

In the end, no independent fiscal watchdog will ever make or stop spending decisions. This task will always be with Parliament, and that is where taxes, policies and budgets are rightfully debated.

The role of a watchdog is different. Its function is to scrutinise policies so that everyone knows what their costs are.

Of course, parties do not typically want to subject themselves to such independent oversight. It is much easier to govern without it. And when you are not in power, it is tempting to promise voters everything under the sun knowing that you do not have to deliver.

So the Greens’ proposal may be insane only because it is difficult to find political support for it. But it is highly commendable for its intentions. And it follows international best practice.

In many countries around the globe, there are now independent watchdogs contributing to a more informed political debate. Some are costing election proposals; most of them are checking if governments play by their own fiscal rules. Other watchdogs are also assessing the regulatory burdens resulting from new policies.

At The New Zealand Initiative we have presented our own proposal for an Independent Fiscal Institution in our report Guarding the Public Purse. It differs slightly from Turei’s idea, for example we would prefer a Parliamentary Office rather than a unit within Treasury. However, our intention of creating greater fiscal transparency is the same as the Greens’. Which is why we welcome their contribution to the debate.

That an incumbent dismisses it as a non-starter, probably means there is hope for it.

Informed educational choice
Martine Udahemuka | Research Fellow |
Retirement savings, lavish family holidays or private dance lessons: these are some of what the cost of a private education in New Zealand could buy according to the New Zealand Herald's calculations.

The paper ran a story last Sunday questioning why New Zealand parents choose private schools for their kids. Many justify the choice based on personal sentiments about the social aspects, better facilities and unique character of the schools. Still, others invested in the schools because they encourage competition inside and outside the classroom. Presumably similar reasoning applies to those keen to invest thousands of dollars in real estate so that their children can attend higher decile schools.

For those who value academic excellence there lacks systematic and objective ways to determine whether these schools are in fact doing the best they can for their students.

Higher decile schools and private schools consistently occupy the top spots on school league tables. Decile rating has become synonymous with quality, as has the comparison between private and public schooling. But it is not possible to determine from raw school comparisons which school has added the most academic value to the students it teaches.

There is no hard evidence that those who attend these schools wind up achieving more than they would have if they were in lower decile schools.

There exist opportunities that can act as a valuable lens to evaluate school effectiveness but many are yet to be exploited. The InZone programme is one example.

The programme provides boarding facilities for students from lower decile areas who could otherwise not afford to live in Auckland Grammar and Epsom Girls Grammar school zones.

A test of the programme’s success and of the effectiveness of these ‘better’ schools would be to compare the achievement of the students who applied and were selected into the programme with that of the students who applied but were not successful and remained in lower decile schools.

Telling signs would be if the InZone students improved academically compared to prior achievements, as well as performed better than those students not selected. InZone has five years’ worth of data with great potential to contribute to school improvement discussions.

Unfortunately the cost of choice for those who value academic excellence currently rests on incomplete information. New Zealand needs to get better at identifying relative school strengths. After all, it is all about trade-offs. 

A gaggle of grumps
Jason Krupp | Research Fellow |
There is nothing wrong with being an old grump. With a lifetime of disappointments to reflect on, old grumps have earned the right to grouse about how things used to be back in their day.

It is far sadder to be a young(ish) grump. And yet this is the situation I find myself in, two years shy of my 40th birthday.  Still, as a former journalist, I feel justified in saying “in my day, the media were required to be objective”.

The piece that raised my ire was not the standard Kardashian clickbait fare, but the Dominion Post’s editorial on Tuesday, titled “Little sign of a mood for change” (pun not intended, I’m sure). In it, editorial writer Anthony Hubbard bemoaned the fact that 47% of people surveyed in the most recent Roy Morgan poll supported National despite seven years under John Key and his “lethal blandness”.

Hubbard suggests this is ludicrous given the government’s slew of mortal blunders. These include signing the Trans-Pacific Partnership Agreement, sitting idle as China’s growth wanes, and failing to resolve the Auckland housing crisis.

You do not have to be a National voter to splutter over the logic.

Surely a more level-headed reading of the numbers would be that just under half of New Zealanders support the government’s bid to open international trade links. Furthermore, it is reasonable to deduce that a vast chunk of the voting public trust National to handle the effects of China’s economic slowdown and the housing crisis more than Labour, which scored 27.5% in the poll.

This is not an endorsement of the National Party. Far from it. The Initiative recently praised Labour’s housing policy. It is just a straightforward reading of the poll numbers.

Hubbard seems to suggest that most voters are too dim to see beneath Key’s game of banal smoke and mirrors to get what is really going on. Instead, Hubbard is hoping a massive personal scandal befalls the Prime Minister so that voters will decamp to the enlightened opposition. By this thinking, voters are dumb when they vote right, and smart when they vote left. That is 18-carat objective right there.

Then again, perhaps I’m being too harsh. If I’m allowed to moan about declining editorial standards, Hubbard, as a newsprint veteran, should be allowed to grizzle over the dominance of the centre-right in Parliament. The other factor in his favour is that he is not a young(ish) grump.


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